FEDS WON'T APPEAL MEDIA CONSOLIDATION JUDGMENT

FCC's Sweeping Ownership Rule Changes Remain in Limbo

WASHINGTON (AdAge.com) -- The Federal Communications Commission's sweeping rewrite of media ownership rules, largely overturned by an appellate court, sounded what could be their death knell today with a decision by the Department of Justice not to pursue an appeal to the U.S. Supreme Court.

The appellate court ruling is still being appealed by other parties to the case, but the Justice Department action makes the high court's acceptance of the case far less likely.

No reason given
The Justice Department, while confirming that it won't appeal the ruling today, declined to give any reason for its decision.

The National Association of Broadcasters said it will pursue its appeal of the ruling as will several media companies.

"We're disappointed with reports that the solicitor general will not be seeking Supreme Court review of media ownership rules," NAB said in a statement. "We continue to believe the Supreme Court needs to clarify lower court decisions related to media ownership, and NAB will be seeking that review" Jan. 31.

FCC could redraft
If the high court doesn't take the case, the next step would be for the Federal Communications Commission to redraft the rules, a process that could take several years.

The ownership rules were the top accomplishment of the outgoing FCC chairman, Michael Powell, and were intended to answer two appellate court decisions overturning existing FCC ownership rules and also unify a number of rules applying to various sectors of the communications industry.

Mr. Powell's approach to making the rules changes, however -- holding just one hearing before a broad change that would have dramatically altered the media landscape -- quickly drew attacks.

Under the new rules, the FCC would have let one company own three TV stations in a single big market (up from two), own two in more than one market, and a single company could have owned the local newspaper, eight local radio stations, the local cable provider and three TV stations.

TV industry changes
Mr. Powell justified the new approach, citing changes in the TV industry over the past 30 years, especially the growth of cable and the Internet, and said consumers had all sorts of additional choices that made some traditional limits on consolidation antiquated. Opponents argued that the additional choices actually provided consumers few different voices, since many were owned by just a few companies, and that the FCC's "public interest" job was to promote consumer diversity.

Consumer groups today warned that a high-court decision not to accept the case should be viewed with caution.

Andy Schwartzman, whose Media Access Project won the appellate court decision, said the Justice Department made its decision despite pressure from broadcast companies to seek the appeal, and that the more than 2 million comments from the public about the rules were the reason.

"A few years ago, the same lobbying campaign [from the broadcast industry] would have almost certainly been successful ... but now after more than 2 million American citizens made their views known, the administration was able to stand up to big media."

Battle continues
While consumer groups were happy, they also warned the battle continues.

"Today's decision is not cause for celebration. It is a call to arms," said Josh Silver, executive director of Free Press, a group that seeks to increase public participation in media policy.

"The FCC is still dominated by industry pawns. We cannot expect this FCC to act in the public interest without listening to the public and conducting independent, credible research on the diversity of local voices."